In today's fast-paced world, consumers have access to an ever-growing array of payment options. From Buy Now, Pay Later (BNPL) services to Cash App, Venmo, PayPal, and embedded payments—these methods offer convenience and a frictionless experience.
However, despite their popularity, these options still fall short compared to the widespread use of credit and debit cards.
Credit and debit cards remain the go-to payment methods for many consumers. Therefore, it's crucial for your credit union to revitalize and enhance its card strategy to stay competitive. Here’s how your credit union can create a unique credit and debit card strategy to stand out in the market.
Tap into the Opportunity of Serving Members with Bad Credit
Most credit card offers are designed for individuals with good to excellent credit scores, leaving a significant portion of the population underserved.
According to Experian's 2019 Consumer Credit Review:
- 16% of Americans have poor credit (FICO score between 300 and 579).
- 18% of Americans have fair credit (FICO score between 580 and 669).
That’s 38% of consumers who may struggle to access traditional credit card options. Your credit union can change that.
By offering secured credit cards tailored to those with no credit, bad credit, or limited financial history, your credit union can help these members build a strong credit score. A secured credit card allows members to place a security deposit that usually determines their credit limit. As they make on-time payments, they establish a positive payment history, improving their credit score.
Secured cards not only help an underserved demographic but also provide your credit union with the opportunity to transition these members into unsecured credit card relationships. Enhance your secured card offerings with rewards and perks similar to popular unsecured cards. Integrating these cards into your credit union’s digital ecosystem allows members to manage their financial health seamlessly through your dashboard or mobile app.
Support Small Businesses with Tailored Credit Cards
Small businesses are the backbone of the American economy, accounting for 44% of economic activity and 43.5% of GDP, according to the Small Business Administration. Yet, these vital contributors are often overlooked when it comes to credit card offerings.
Historically, only the largest financial institutions provided small business credit cards, leaving many business owners with limited options. Now, your credit union has the unique opportunity to meet the credit and lending needs of small businesses within your community. By offering tailored credit card solutions, you can foster loyalty and build long-term relationships with these business owners.
Elevate Your Credit Union’s Card Payment Experience
Diversifying your card offerings is essential, but providing a seamless member experience is even more critical. Integrating technology into your card payment processes helps keep your credit union competitive in the fast-evolving financial services landscape.
Consider offering an integrated card payment experience that allows members to make payments over the phone, in-branch, or via mobile app. This can include using cards for account funding, loan payments, and collections. By streamlining the credit card payment process, your credit union can create efficiencies and enhance the overall member experience.
Prioritize Credit Card Security
In an era of digital wallets and contactless payments, robust security measures are non-negotiable. A strong security protocol is crucial for building member trust and loyalty. Your members should feel confident in the security of your credit union’s card offerings without constantly worrying about data breaches.
To achieve this, your credit union should focus on:
- PCI-DSS Level 1-Certified Payment Processing: Protecting cardholder data in both in-store and e-commerce transactions.
- Remote Card Controls: Empowering members to control the status of their cards through your mobile app.
- EMV Chip Technology: Preventing counterfeit fraud with EMV chip cards.
- Authenticated Encryption: Ensuring secure transmission of cardholder data.
- Fraud Detection: Implementing active and passive measures to prevent fraud.
Differentiate Your Credit Union's Credit Card Offering with FLEX
At FLEX, we are committed to making the member payment experience as seamless as possible. Through our recent partnership with Beyond, a leader in the payments industry, we offer credit unions an integrated solution to enhance their credit card offerings.
This best-in-class integration, supported by the FLEX core processing system, allows your credit union to provide a safer, more convenient, and fully integrated payment experience.
Ready to offer your members an elevated way to pay? Explore our latest eGuide for practical tips, best practices, and expert insights.
